What Makes a Gold Coin Cheap and Valuable?
That is why you are coming in search of the cheapest gold coin that you can stash away, realising an investment. But, after all, does cheap denote as regards gold coins, and is cheaper necessarily the same as less valuable? It helps to consider this view like a mine prospector, spade in hand, to get clarity, risk and opportunity.
The expression cheap in the language of gold coins has nothing to do with getting something worthless. Think less of the absolute amount of gold obtained and more of the cost per pound, euro and dollar spent. The trick? These are benchmark-priced, and the scouting is on coins whose price is nearest to the existing spot price of gold. This price (which is a spot price) is the reference price of one ounce of gold in the world market.
However, be careful. Other coins are considerably less dazzling than the price associated with them, being packed full of premiums or collector’s prices. Others come with a heavy bridle of dealer markups, marketing glitz or limited edition flattery. Avoid them in case what you seek is maximum metal at the minimum cost.
Any valuable gold coin should be at least 22K (24K on such a coin as Britannia or Maple Leaf) in purity, have proven authenticity, and, preferably, widespread recognition. Since when does the time come to take the chips off the table, you would rather have speed combined with a zero-headache experience of finding a way to turn your coin back into cash?
New generation Low-Value Gold Coins: The Investors Opt?
Modern mass-produced bullion coins are the best deals in terms of gold investing. We are referring to such items as 1 oz Gold Britannias, Canadian Maple Leafs, and American Eagles. Why? It is just the supply and demand. These are manufactured in bulk by mints, and the premiums above spot are thus kept at a minimum.
We are improvising a minute. Such a leading choice is the reliable Gold Britannia in 1 oz. Here’s why:
The purity of 24K gold (since 2013)
Government-assured weight and metal content are government-assured
Known and liquefiable in nearly any gold-loving country
The coin is one of the lowest premium coins of this size and reputation . Kangaroo of Australia and the Philharmonic of Austria are like this. Contemporary minting technology makes these coins fresh, safe, and verifiable.
That is nuts and bolts. When you see a 1 oz gold coin with a premium slightly above spot, what you are looking at is a very good contender for the term cheapest without any kind of value loss in the future.
Beyond Bullion Are Old Gold Coins Worth It?
The Glimpse and Glamour of Older Gold
Admittedly, many investors are bitten by the history bug. French Napoleons, British Sovereigns or earlier US Double Eagles are quite fascinating. Wars, economic meltdowns and crooked fingers of villains and miserly fingers alike have not spared them.
But do they check the box of cheap gold coins? Perhaps, but there are wrinkles.
Coins made in earlier times are able to bring more money than their gold value alone, provided they are unique, in prime shape, or have an attached anecdote. At times, collectors come in and push prices through the roof. On pure gold weight? They will not be able to compete with modern bullion in value.
Nevertheless, certain historical coins trade a lot closer to spot price, in particular the more widely available ones such as British Sovereigns, or French 20 Francs. They provide a golden portion of history that could be used up to date in terms of trading and investing purposes. The rub: condition and authentication count more, and online purchases in the wild west of the online markets run a higher risk of fakes than the pure online markets.
Why Not Stick Scrap Gold?
Fine thought–but scrap has more trouble than most people imagine. Without tools or training to test purity, it is hard to judge. And, you are likely to be hit by a spread on purchase as well as on sale. Gold purchasers are not charities. Go with popular coins so that they sell easily and are trusted by the buyer.
Premiums: The actual fee attached to it
Have you ever seen gold coins jumping way above the spot? It is that premium–that premium which you give, on top of the raw price of the gold of the coin. This is what will inflate that additional price:
Dealer fee, or mint fee
The restricted edition! marketing
Extra-fancy packaging
High demand, e.g. a crisis year
Price comparison is fruitful. Other UK dealers, e.g., rotate year-long specials on Gold Britannias or Maple Leafs with some of those premiums shredded to bits during promo weeks. In other cases, coins can become ever so slightly expensive as they are purchased in small batches or sets.
Gold or Token? Just stay with Real Coinage.
Although the world of digital gold, or now so-called tokenised gold assets, is very tempting, there is no satisfaction as well as liquidity that a physical, solid, 1 oz coin attracts when held in your hand. You can sell it to a dealer, transfer it without any hassles or even squirrel it away until a rainy day.
The rules of digital presentations may be complex, there may be third-party risks cited to be improper, and occasionally, there may be restrictions on redemption of real and tangible gold.
Quick Tips: Making the Wise Purchase
Never purchase through an unrepentant gold dealer, they say, so think classic gold shops rather than a suspicious advertisement by a bloke in the classifieds.
Obtain government-backed coins. They are too easy to sell and less likely to be fakes.
Compare the total cost rather than the headline price. Other sellers tempt you with cheap prices but charge you extra fees.
Check the popularity of coin resale. Britannia, Maple, Krugerrand, Eagle, and they are all the kings of liquidity.
Be careful not to be hypnotised by the idea of collectability, unless you are a genuine coin nerd or history buff; you will be greatly overpaying, and you will not get much more than one might in the ordinary business.
